According to the World Lottery Association (WLA), members which include all major state and national lotteries worldwide, generated over $260B in sales in 2015. If we assume an average game costs $2, and even accounting for a percentage of pure digital games where no paper ticket is issued, it's possible that the 2015 sales resulted in well over 100 billion paper tickets. When it is considered that lotteries utilize expensive specialized security paper to print payable on demand tickets or documents (the vast majority of which are never redeemed) the corresponding costs can be in the tens of millions of dollars.
In addition to the amount of paper consumed by the lottery industry every year to control security and prevent fraud, lotteries must carefully control specialized terminals to print and validate payable on demand tickets or documents. The cost to build, operate, and maintain these terminals in physically secure locations with reliable power and a secure data connection means that lotteries are forced to make difficult business decisions about what locations can support the costs and infrastructure requirements. Access to ticketing is also limited not just by the number of locations, but also by the operating hours of the retail locations where the terminals are installed.
Similar problems involving paper and terminal logistics also exist in other gaming venues worldwide. For example, in the United States around $10 billion United States Dollars (USD) are wagered on horse racing annually (circa 2016) with the United Kingdom (UK) and Japan wagering the equivalent of around $16 billion USD and $22.5 billion USD respectively. These horse racing wagering venues experience problems comparable to lotteries in that almost all horse racing venues employ specialized betting terminals and print payable on demand bet tickets in real time. Of course, lotteries and horse racing venues are not the only gaming systems that experience this sort of logistical problem; usually any form of draw game wagering (i.e., where a wager is made on the outcome of some future drawing or event—e.g., dog racing, sports betting, virtual sports betting, Keno) is enabled by these types of paper and terminal systems.
In response to the limitations imposed by today's paper wagering systems, many solutions have been offered that remove all aspects of physical ticketing—paper or otherwise. In these solutions, the entire process for purchasing, viewing, and redeeming wager tickets is done via the Internet or a mobile phone. In such solutions, the purchase is completed via the Internet where the player accesses a designated gaming web site via a personal computer or mobile phone. The purchases are made following a detailed online registration process to ensure that players are of legal age, possess a valid bank account or debit card for the purchase, and located within the jurisdiction of the gaming venue. In the case of horse racing, the online registration process is referred to as Advanced Deposit Wagering or ADW where the player must deposit funds into a holding account and then use those funds for betting. Following the placement of a wager initiated from one of these online accounts, the player's tickets are generated and stored in a digital application such as the gaming web site or associated mobile application. Additionally, these types of solutions are typically highly regulated, consequently with limited availability.
While such solutions may provide convenience for some players, they discourage other players and create new avenues for fraudsters to digitally attack gaming venues. Attacks on web sites and mobile applications are well known and continue to present significant threats to all businesses. These solutions also introduce challenges for players who prefer to wager anonymously using cash as well as for players who have concerns that a purely digital representation of their ticket in the “cloud” opens up the possibility of being denied a win. With a purely digital solution, without any payable on demand ticket or document, proving that a player has participated in the game relies entirely on digital data and software, which some players fear may be modified at any time or fail resulting in the loss of their potentially winning virtual wager. Also, these solutions prohibit or at the very least discourage impulsive wagers where a player may make an occasional wager (e.g., when his or her favorite team is playing a significant game) but does not wish to go through the inconvenience of authentication to a system and establishing a long-term account.
What is needed is a completely new solution to securely manage the generation and validation of digital gaming tickets or documents that includes a secure and reliable payable on demand hardware device addressing the shortcomings of paper systems while still providing a physical embodiment for the player to possess and ensure confirmation of wagers. The ideal system is one that does not impose any special requirements on sales in terms of physical infrastructure, power, light, etc. and does away with antiquated and fraud-prone paper ticketing terminals. The ideal solution is one that involves a portable, low cost, tamper-resistant, secure digital ticketing and storage device which is provided to and operated by players, not by gaming retailers as is typically done in today's gaming systems.
It is important to note that this ideal type of solution is not a simple, digital storage device, memory stick, etc. In order for a solution to work reliably and securely, it must include dedicated functionality and security compatible with or exceeding existing proprietary gaming terminals. For example, a new solution must support communication and transactional exchanges with existing central gaming systems in a manner similar to the transactional exchanges between existing paper ticketing terminals and central gaming systems. Such a device would ideally also include specialized cryptographic capabilities that enable central gaming systems to recognize the authenticity of these devices and the authenticity of each unique digital ticket that they generate just as they are able to do with today's fixed-location paper ticketing terminals.
With such a device, every person who engages in gaming venues has the means to securely generate their own authentic tickets or documents that existing central gaming systems can accept just as they accept such requests from their own terminals installed in retail locations today. In addition, assuming this ideal device is personal, it can also serve as the secure storage medium for pre-purchased play credits and physical proof of participation for any tickets generated by the device.